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Legal Definition of Sub-Letting?


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I own a flat (mortgaged) in a large block, so the property is owned by me on a leasehold rather than freehold basis.

 

The flat is rented out to tenants.

 

I pay a monthly fee to a property management company, who have recently started chasing me for an additional fee for "consent to sub-let". This is the first I have heard of such a fee in the near 8 years I've owned this flat.

 

I have explained to them that the property is let to tenants, and is not sub-let. They have responded by saying that because the property is owned by me on a leasehold rather than freehold basis, that legally I am sub-letting the property rather than letting it.

 

I'm interested to know whether this is legally the case (it may well be, I don't claim to be an expert...), so that I can further assess whether this seems like a legitimate fee they are requesting from me, or whether it's more like a speculative invoice similar to what I would expect a private parking firm to try and charge.

 

Any advice appreciated!

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I am not an expert either, but a colleague of mine who owns a leasehold flat recently had a problem with a neighbouring flat that had been let, by its leasehold owner, to a tenant.

 

The tenant caused significant problems and was eventually evicted. The management company have now warned the owner that the lease forbids sub-letting, so she cannot install another tenant. As the owner's business is letting flats, this one is now for sale.

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I am not an expert either, but a colleague of mine who owns a leasehold flat recently had a problem with a neighbouring flat that had been let, by its leasehold owner, to a tenant.

 

The tenant caused significant problems and was eventually evicted. The management company have now warned the owner that the lease forbids sub-letting, so she cannot install another tenant. As the owner's business is letting flats, this one is now for sale.

 

Thanks, I don't think that will be an issue here, there's no suggestion from the property management company that the flat's shouldn't be let out, just that they want a fee when it happens.

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Technically yes, you are your freeholders tenant and those to whom you have rented the flat have a sub-lease.

 

You need to look at your lease, some prohibit sub-letting and some say you can only do it with the consent of the freehold. Where consent is required there is usually a provision entitling them to charge a fee for their "costs" (which are invariably spurious).

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Technically yes, you are your freeholders tenant and those to whom you have rented the flat have a sub-lease.

 

You need to look at your lease, some prohibit sub-letting and some say you can only do it with the consent of the freehold. Where consent is required there is usually a provision entitling them to charge a fee for their "costs" (which are invariably spurious).

 

Thanks for your reply. When you say there is a provision for "them" to charge a fee, would "them" include a property management company, or would it refer to the freeholder of the land?

 

I guess I'm trying to draw a parallel here with private car parks, where a parking management company try and charge fees where it should really only be the land owner who has the authority to do so.

 

I understand that the management company have a job to do, and I pay them well enough each month already for their services, I'm just trying to get my head around why they can charge me a "consent" fee for letting the property, when it's not really their concern. I could understand it if it was the freeholder requesting this fee.

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Thanks for your reply. When you say there is a provision for "them" to charge a fee, would "them" include a property management company, or would it refer to the freeholder of the land?

 

I guess I'm trying to draw a parallel here with private car parks, where a parking management company try and charge fees where it should really only be the land owner who has the authority to do so.

 

I understand that the management company have a job to do, and I pay them well enough each month already for their services, I'm just trying to get my head around why they can charge me a "consent" fee for letting the property, when it's not really their concern. I could understand it if it was the freeholder requesting this fee.

 

The comparison with private car parks isn't really valid. You don't normally have a contract with the private parking companies but as a Leaseholder you certainly do have a contract with the Freeholder and the requirement to pay a fee for agreement to let/sub-let is a common clause in leases. AFAIK there's no requirement that the fee for agreeing to you letting/sub-letting has to represent the actual costs incurred. The Property Management Company is normally acting for the Freeholder, as their agent, and has the authority to give the approval and charge the fee.

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The comparison with private car parks isn't really valid. You don't normally have a contract with the private parking companies but as a Leaseholder you certainly do have a contract with the Freeholder and the requirement to pay a fee for agreement to let/sub-let is a common clause in leases. AFAIK there's no requirement that the fee for agreeing to you letting/sub-letting has to represent the actual costs incurred. The Property Management Company is normally acting for the Freeholder, as their agent, and has the authority to give the approval and charge the fee.

 

OK thanks that clears that up, sounds like it's a valid (if annoying...) charge.

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Ethel is absolutely correct.

 

In my experience, albeit in commercial leases, consent fees are often outrageous and bear no relation to costs, but you just have to suck it up.

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